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Corporate Governance Rating of 

 Jet Airways

By : Group 7

Dipesh S Jain

Manmeet Gandhi

Minesh Shah

Mohit Dube y 

Saura bh Bajaj

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 Jet Airways ² A Profile

Industry ² Aviation (Service)

Listed on ² BSE and NSE

Market Cap. ² INR 6,472 Cr.

Registered Office ² Mumbai (India)

 Auditors ² Deloitte Haskins & Sells,Chaturvedi & Shah

2

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Board of Directors Composition

3

12%

25%

63%

Executive Directors

Non-Executive, Non-Independent Directors

Independent Directors

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Comparison of BOD of Jet with Industry

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Particulars Company  

Industry 

 Average

Number of Directors 8 7

Percent Independent  63% 74%

Percent Women 0 5%

Percent Substantial Industry Knowledge 25% 40% Average number of other public company 

board seats

1.5 2.3

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Corporate Governance Ratings

ParticularsHome Rating 

 Absolute Relative

Overall Rating  5.7 8.1

Board Accountability  6.7 10.0

Financial Disclosure & Internal Controls 5.6 8.2

Shareholder Rights 8.2 10.0

Remuneration 2.1 4.4

Market for Control 5.7 7.1

Corporate Behavior 5.9 8.9

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Methodology for Rating2 methods - Relative Rating & Absolute Rating 

1.Identify Categories & Sub-sections of the categories.

2.Assign weights between 0 & 1 to each sub ² section of the category & also to theCategories.

3.Score for each parameter of the sub-section is determined, either 0 or 1 based on the

information from the Annual Report.

4.Weighted Score is determined.

5.Done for 3 companies in the Aviation industry.

6.Absolute and Relative % of compliance are determined.

GMI_Rating_metrics.xlsx

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Board Accountability 6.7

Sub ² sections considered : 20

Scored ² 11.9 out of 17.8

 Absolute Rating ² 6.7

Relative Rating ² 10

Observations & Opinion :

1. The board primarily comprises of Independent directors (5/8).It 

is a positive governance practice as the board is potentially able to

execute adequate independent oversight.

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F

inancial Disclosure & InternalControls 5.6

Sub ² sections considered : 16

Scored ² 9 out of 16

 Absolute Rating ² 5.6

Relative Rating ² 8.1

Observations & Opinion :

1.There is no risk management committee in place.

2.The Audit committee reviews and discusses the company's policy with respect to risk 

assessment and risk management.

3.The company does not make comprehensive disclosure on its risk management policies.

4.The remuneration and fees for Auditors (Delloite Haskins and Sells, Chaturvedi & Shah

 was about INR 2.39

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Shareholder Rights 8.2

Sub ² sections considered : 6

Scored ² 4.6 out of 5.6

 Absolute Rating ² 8.2

Relative Rating ² 10

Observations & Opinion :

1.Routine proxy voting is available in person.

2.There is no cumulative voting permitted in election of directors.

3.There is only a single class of shares with equal voting rights per share.

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Remuneration 2.1

Sub ² sections considered : 4

Scored ² 0.8 out of 3.8

 Absolute Rating ² 2.1

Relative Rating ² 4.44s

Observations & Opinion :

1.The company does not have an scheme for Stock Options of its shares either

for the director or for the employee. Hence there is no potential dilution which

could devalue currently outstanding stock.

10

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Market for Control 5.7Sub ± sections considered : 5

Scored ± 2.4 out of   4.2

 A  bsolute Rating ± 5.7

R elativeRating ± 7.1

Observations & Opinion :

1.The compan y has a single entit y or shareholder group w ith  voting po w er of  80% held  b y Chairman Naresh Go yal.W e consider such large o w nership positions to  be a deterrent, severel y w eak ening the mark et for control. 

2.Compan y has not emplo y ed an y unilateral tak eover defense. 

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Corporate Behavior & CSR 5.9

Sub ² sections considered : 14

Scored ² 4.1 out of 7

 Absolute Rating ² 5.9

Relative Rating ² 8.9

Observations & Opinion :

1.The company in its annual report boasts of having workplace safety policy in place

but not much is disclosed to that effect.

2.Also environmental disclosures are not made.

3.Company's code of ethics does not address whether company funds may be used tofund the political parties.

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Overall Rating 5.7

The Overall rating is done only in the home market.

The Home ratings are as follows ²

 Absolute : 5.7

Relative : 8.1

This is the weighted average of the ratings of the 6 categories with

each category having equal weights.

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Limitations

1.Weights assigned are subjective.

2.For relative rating, number of companies considered is very small.

3.Sub-sections in each categories and Categories in themselves may 

not be exhaustive.

4.The tools applied may not be scientific in nature though

appealing.

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